Japanese Industry Minister Yasutoshi Nishimura raised concern that the new US law restricting tax credits for electric vehicles to those assembled in North America may violate international law.
On Wednesday, Nishimura voiced his worry about the new electric vehicle tax credits when he met US Commerce Secretary Gina Raimondo in Los Angeles as he participated in the Indo-Pacific economic Framework talks.
The newly introduced regulation under the Inflation Reduction Act limits the eligibility of electric vehicle tax credits to those made in North America. According to the Alliance for Automotive Innovation, credits for nearly 70% of the 72 models that were previously eligible were terminated when President Joe Biden signed the legislation.
Midway through August, the Biden administration stated that up to $7,500 in tax credits were still available for about 20 models. However, there are concerns that almost all EVs will be disqualified due to the new regulations involving the source of batteries and minerals that will be effective on January 1. In addition, there is also a constraint on the price and income caps.
Last month, the Japan Automobile Manufacturers Association indicated that it was concerned about the law and will closely monitor developments as per Automotive News.
“We will keep a close watch on future developments and will consult and consider how to respond to them in cooperation with the government,” a Japan Automobile Manufacturers Association spokesperson said.